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European shares claw back losses Shares falling despite rate cuts
(30 minutes later)
European stock markets have clawed back some of their early losses following the news of co-ordinated cuts in interest rates. European stock markets are down sharply despite the co-ordinated rate cuts in the UK, Europe and the US.
The Bank of England, the European Central Bank (ECB), and the US Federal Reserve have all reduced their key rates by half a percentage point. Just before the start of trading on Wall Street, London's benchmark FTSE 100 was down 4.1%.
After the cut London's FTSE 100 index was up 0.5%, France's Cac 40 was down 0.1%, and Germany's Dax was 0.9% lower. Elsewhere in Europe, Germany's Dax index and the Cac 40 in Paris were both trading down by 4.4%.
All had earlier seen hefty losses due to growing global economic concern. The Bank of England, the European Central Bank (ECB) and the US Federal Reserve have all reduced their key rates by half a percentage point.
If we can get a good close today, I will be more optimistic Tom Hougaard, City Index class="" href="/1/hi/business/7658286.stm">Financial crisis at-a-glance: 8 Oct class="" href="/1/hi/world/south_asia/7658899.stm">South Asian shares fall class="" href="/1/hi/world/middle_east/7658902.stm">Huge sell-off on Arab exchanges London's FTSE 100 index had opened sharply lower. It was briefly positive after the rate cut but then fell again.
The key now is for the markets to respond to this intervention with reason and a measure of realistic Stephen Gifford, Grant Thornton Financial crisis at-a-glance: 8 OctSouth Asian shares fallHuge sell-off on Arab exchanges
The falls in Europe and Asia had followed a huge sell-off on Wall Street, which saw the Dow Jones index close Tuesday down more than 500 points.The falls in Europe and Asia had followed a huge sell-off on Wall Street, which saw the Dow Jones index close Tuesday down more than 500 points.
Some of the key developments on another day of market turbulence have included:
  • The Bank of England cut UK rates from 5% to 4.5%, the Federal Reserve reduced US rates from 2% to 1.5%, and ECB cut eurozone rates from 4.25% to 3.75%
  • The UK government has announced details of a rescue package that will see it put up to £50bn ($88bn) into banks to strengthen the financial system
  • ING Direct announced it was acquiring more than £3bn of deposits held by British savers with Icelandic-owned banks
  • The British government said all UK savers with accounts in the closed Icelandic internet bank Icesave would get all their money back.
  • Austria became the latest country to fully guarantee savers' deposits
Some of the key developments on another day of market turbulence have included:
  • The Bank of England cut UK rates from 5% to 4.5%, the Federal Reserve reduced US rates from 2% to 1.5%, and ECB cut eurozone rates from 4.25% to 3.75%
  • The UK government has announced details of a rescue package that will see it put up to £50bn ($88bn) into banks to strengthen the financial system
  • ING Direct announced it was acquiring more than £3bn of deposits held by British savers with Icelandic-owned banks
  • The British government said all UK savers with accounts in the closed Icelandic internet bank Icesave would get all their money back.
  • Austria became the latest country to fully guarantee savers' deposits
"It's good to see the FTSE 100 being up on the day," said Tom Hougaard at City Index. "The key now is for the markets to respond to this intervention with reason and a measure of realistic optimism," said Stephen Gifford, chief economist at Grant Thornton.
"If we can get a good close today, I will be more optimistic."
Earlier in Asia, Japan's Nikkei had closed down 9.4% at 9,203, its lowest finish since June 2003.Earlier in Asia, Japan's Nikkei had closed down 9.4% at 9,203, its lowest finish since June 2003.
Hong Kong's Hang Seng index closed 6.2% lower. India's main index fell 8% at one point but eventually closed down 4.3%.Hong Kong's Hang Seng index closed 6.2% lower. India's main index fell 8% at one point but eventually closed down 4.3%.
Markets in Australia, China and Taiwan were among other fallers.Markets in Australia, China and Taiwan were among other fallers.
Russia's Micex exchange has suspended trading until Friday, after the index dropped more than 14% in the first half-hour of trading.Russia's Micex exchange has suspended trading until Friday, after the index dropped more than 14% in the first half-hour of trading.
FTSE 100 INDEX: 8 October 2008FTSE 100 INDEX: 8 October 2008
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